Native advertising to account for 15% of agency display budgets by 2015, yet confusion remains over its definition, study shows

The majority (83 per cent) of UK agencies include native advertising in their media plans, with the format expected to account for 15 per cent of display budgets by 2015, according to a Far Partners report.

The study, commissioned by Adyoulike, surveyed 500 senior business directors at the top 20 media agencies in the UK comprising a mix of heads of digital, digital strategy directors and digital business directors.

Currently native advertising accounts for 9.2 per cent of total digital display spend, but that figure is estimated to reach 15 per cent by 2015, according to the report. The 17 per cent of agencies which don’t yet incorporate native advertising into their media plans, stated that they are planning to do so.

However, the report highlighted that there was still uncertainty regarding the exact definition of native advertising, with 23 per cent of respondents stating they were “not confident” they could define it.

There was also uncertainty over which budgets for it will come from within agency departments.

In most cases currently there were no dedicated budgets for native advertising, with all spend being taken straight from display budgets.

Respondents cited the “ineffectiveness” of display advertising as their reasons for the growth in native advertising, with awareness, brand engagement and consumer education given as the top three roles of native advertising campaigns.

Meanwhile other issues that surfaced as concerns among respondents that require addressing are how to scale it, how to create or source relevant content for it, the client sign-off process for content and measurability.

Two thirds (63 per cent) of agencies were unsure the sector was effectively regulated while only a quarter were convinced that effective regulation currently exists.

The majority of respondents also said they believe native advertising should be traded based on engagegement rather than using flat sponsorship rates.

Francis Turner, managing director of Adyoulike UK said: “Native advertising continues to grow in the UK and our in-depth agency study shows that brand marketers are fully engaged with the medium. Native advertising offers engagement, a clear voice and opportunities for brands that traditional display cannot compete with; it also works across platforms – tablet and mobile – that other digital advertising types simply cannot do.

“But there are some significant challenges still. The survey highlights that agencies are particularly interested in the issues of scaling native advertising, effective regulation and overcoming some of the perceived issues around content creation. These are issues that specialists such as native ad-tech providers are working to address for brands.”

Agencies that are already planning native advertising campaigns said the format is useful for cut-through, in an increasingly commoditised display market where banner blindness remains an issue. Many also stipulated that client demand for native advertising to be used is on the increase.

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